Number 49


Secure America's Future Economy


Spring 2008


  I.O.U.S.A. Drives Home that Fiscal Mess is for Real   What ? Repeal Medicaid ?
  Big Government Delaware   Health Care Capitalism
  Waste VIA Bad Science  




     On April 7, 2008, the film I.O.U.S.A. about the looming U.S. fiscal meltdown was screened in Philadelphia at the Ritz East Theatre.  SAFE directors Steve McClain, Bill Whipple, and Daniel Kerrick were there, and here is our report.

     The near capacity audience was diverse and enthusiastic.  Talking to people in the line, it quickly became evident that they knew what the film was supposed to be about and wanted to hear more.  There was also awareness of the parallel to Al Gore’s film on “global warming,” which regardless of whether one agrees with it (we do not) has raised public awareness of this alleged threat.

     Gee, said someone on the way out, this (I.O.U.S.A.) is the movie that should be called “An Inconvenient Truth.”  Right, because it is inconvenient indeed that the country is on the verge of a fiscal meltdown and may have to curb its preference for leisure/consumption vs. work/production.

     The film offers a compelling mix of gee whiz graphics (eye candy to make the financial data go down), statements of numerous speakers in settings both formal and otherwise, and action scenes from America (losing its way) and China (on the rise).  Did you know the second biggest U.S. export to China is demolished vehicles to be melted down and made into steel because the U.S. capacity for this kind of function is wasting away?

     There are sound bites from speeches of U.S. presidents going way back.  Some are more appropriate than others, but the point is fairly made that the fiscal mess has been developing for some time with leaders from both parties contributing.

     David Walker (formerly the U.S. Comptroller General) and Robert Bixby of Concord Coalition are shown speaking out on the Fiscal Wake-Up Tour and also behind the scenes.  Walker’s framework of the four American deficits (budgetary, savings, balance of payments, and leadership) is used as the structure of the film.

     There are statements by William Bonner (“Empire of Debt”), Warren Buffet, former Treasury Secretaries Robert Rubin and Paul O’Neill, several members of Congress (notably Ron Paul from Texas), a skit by actor Steve Martin et al. re the strange notion that things should not be bought unless one can afford them, “ordinary people” who stumble when asked basic economic questions, etc.

     As might be expected, I.O.U.S.A. has various flaws.  Some will surely be fixed before the film is released commercially around the end of August, such as explaining that David Walker has left his government job to head the newly formed Peterson Foundation and updating the reporting of recent financial events.

     Other flaws will probably carry over, notably the tendency to associate the leadership deficit with the current president while implying that the adverse fiscal trend was arrested under his predecessor during the 1990s.  Thus, for instance, the national debt clock in New York City was supposedly stopped for a while because it was not designed to run backwards.  (No doubt the clock was stopped, but not for that reason.  The National Debt that it depicts, including borrowings from the Social Security and Medicare trust funds, rose each and every year during the 1990s.  FY 2009 Budget, 2/4/08, Table 7.2).  For a more balanced presentation, see 1/28/08 entry to the SAFE blog, “State of the budget:  a 40-year slump.”

     Notwithstanding the ability of presidents to influence what happens, the role of legislators is shortchanged.  The many members of Congress who have not only approved excessive budget requests but demanded more deserve to be mentioned, not just mavericks like Ron Paul who have gone against the flow.

     And, of course, I.O.U.S.A. attempts to foster awareness of the fiscal mess, but it does not offer solutions.  That is something the country will have to address, but we can all agree that awareness is the first step.

     Did this film reach the audience?  There was clapping when it ended, and in the Q&A session that followed hands shot up all over the theatre and the questions asked demonstrated passion.  The reaction at other events we have attended, such as the Fiscal Wake-Up Tour stop in Baltimore, was decidedly more restrained.

     Current plans are for I.O.U.S.A. to be commercially released around the end of August. Go see it in a theater near you, and encourage your families, friends, and others to do the same.  And while you are it, remind them that SAFE has been sounding the alert for years and has some pretty good ideas for averting a fiscal meltdown.

     This could be the start of something big!




The less you use your brakes, the more miles per gallon.





     Many have said that there are too many government employees in the United States.  Delaware is perhaps a microcosm of this problem.  Out of a total of 428,000 non-farm workers in Delaware, 55,700 are employed by state or local government (DE Department Labor).  This means fewer than seven are working to support one state or local government worker.

     Just like businesses have done, a top to bottom evaluation needs to be conducted to determine the need for the number of employees.  Further, are these employees engaged in activities that meet a real need?  For example, Delaware currently has 19 school districts, each having a full administrative staff.  Could we perform our educational function with fewer districts and thus, fewer administrators?  Could many of our government services be privatized?

     Just like the pressures on our Social Security system, as the wave of “baby boomer” Government workers retire, there will be pressure to fund pensions and medical care for them.  Further, Delaware is facing an expected decline in revenue over the next few years.  This will place even further pressure to continue at the current level of employees.  New Castle County is also faced with declining revenue.  The County government is already reducing employees.

     The breakdown is, as follows:  30,200 state and 25,200 county and city.

     Solutions of the federal debt problem may necessitate help from your state and local governments.  It is not too soon to tighten our belts and get ready.



Questions to ask the Doctor:


The author of “How Doctors Think” says mis-diagnosis occur about 15% of the time.  He advises:

     Ask:  “What else could it be?”

     Ask:  “Could it be two things?”

If you are not recovering,

     Ask:  “Is there anything you see or in the tests that doesn’t fit the diagnosis?”



          - Bill Morris


     Let’s say, arbitrarily, that 40% of what the federal government does is necessary to our well-being while 60% is wasteful and therefore harmful to our well-being.  Here are some comments about three specific areas within the 60%.

     Ethanol in gasoline:  A blend of 10% ethanol and 90% hydrocarbons, originally called “Gasohol,” had some environmental benefit.  Years ago, engines were operating “rich” with more gasoline than could be consumed by the oxygen in the air entering the engine.  This was done to ensure smooth operation of the engine.  As a result, some unburned hydrocarbons came out the tailpipe and polluted the air.  The oxygen atom in ethanol diluted the hydrocarbon entering the engine so that fewer unburned hydrocarbons went out the tailpipe.  The result was less pollution, at the cost of slightly less smooth operation, fewer miles per gallon, and the subsidy via the reduced tax for “gasohol.”

     The currently mandated ethanol in gasoline is a waste, because newer engines are designed to operate smoothly and burn all the gasoline.  There is very little, if any, decreased pollution due to inclusion of ethanol.  The direct and indirect costs are significant, so the mandate of ethanol in gasoline should be repealed. 

     Global warming:  We are being told that carbon dioxide and other greenhouse gases are the major cause of global warming.  We are also told that, unless we decrease use of fossil fuels, catastrophic effects of warming might occur.

     The above assertions are refuted by scientific evidence.  Warming and cooling cycles of about 1500 years have occurred for hundreds of thousands of years (see the 2007 book:  “unstoppable Global Warming” by Singer & Avery).  The Medieval Warm Period (900-1300 AD) was warmer than today without significant use of fossil fuels, and without catastrophic effects.  Warming and cooling are not correlated with carbon dioxide, but are correlated with the activity of the sun.

    In spite of this evidence, there is a steady drumbeat of publicity claiming that use of fossil fuels is a problem.  Scientists are receiving government grants to work on the so-called problem.  Uneconomic forms of energy are subsidized at least partially on the basis that they do not emit carbon dioxide.

     The use of fossil fuels continues to increase, which is necessary for the well-being of the over 6 billion people on the earth.  The increasing carbon dioxide is beneficial to plants and indirectly to humans and animals. 

     Government grants and subsidies based on misdirected concern about carbon dioxide emissions come at substantial costs.  Those costs pale in comparison to the potential costs of limiting the use of fossil fuels.  Abundant energy is necessary for the well-being of everybody on the Earth.

     Along with several organizations and many individuals, I have been publicizing the science that refutes the ideas that fossil fuels are causing global warming, and that global warming might have catastrophic effects.  I have given nine talks so far, mostly to rotary clubs.  At the last five talks, I provided an 8-page handout, including a critique of Al Gore’s book, “An Inconvenient Truth”.  I will be happy to send a copy of the handout to any member of SAFE who wants it (feel free to photocopy any part of the handout).

     If someone wants to give a similar talk, I will be happy to provide information.

     Nuclear Power:  The present high price of energy makes it even more desirable to install new nuclear power capacity in the United States.  The additional power will lower the cost of energy, thereby making it less difficult to pay down the federal debt.  Unfortunately, the government requires unnecessary delay in getting new nuclear power installed.

     The delay and unnecessary cost results from political pressure from those with unrealistic fear of nuclear radiation.  This fear is based on bad science concerning low level radiation, due to the “linear no-threshold” assumption.  Massive radiation causes many deaths and no radiation causes no deaths.  A straight line drawn between the two points implies that very low levels of radiation will cause a few deaths.  Actually, low levels of radiation are beneficial.  This phenomenon, called “hormesis” occurs widely.  One example is that a medicine at the right dose can cure you while a massive amount can kill you.

     A large amount of data shows hormesis for nuclear radiation.  One example comes from Taiwan, where reinforcing rods containing radioactive cobalt were mistakenly used in constructing apartments.  When this was discovered, the health histories of tenants were analyzed.  The incidence of cancer was a fraction of what would be expected.  Another example is analysis of radon levels and cancer levels in most of U.S. Counties.  A negative correlation is highly significant.  Presumably, a little radiation activates the immune system resulting in more resistance to disease.

     The federal government should acknowledge the safety of nuclear power, and remove roadblocks to its timely expansion.

     A detailed discussion of nuclear power is included in a 2007 paper, “Environmental Effects of Increased Atmospheric Carbon Dioxide” by Arthur Robinson, Noah Robinson, & Willie Soon, available online in PDF & html formats at




        - Bill Morris


     Current problems with the economy appear mild compared to what’s coming down the road, with the overhanging Medicare and Medicaid and Social Security commitments.

     There is no easy solution.  Strong action is required.  Here is a suggestion.  Congress should take seriously the tenth amendment to the Constitution.  Activities not expressly authorized in the constitution for the federal government should be devolved to the states.

     In the spirit of the Tenth Amendment, Medicaid should be repealed, leaving it to the states to decide how much of this charity to provide.

     Yes, outright repeal of Medicaid.  Leave it to the states to provide Medicaid for the poor.  At present, federal and state governments share the cost of Medicaid.  Because the federal government pays part of the cost, state governments “gold-plate” Medicaid, adding classes of benefits that would not be included if the state taxpayers had to bear the cost.

     Getting grandma into a nursing home and on Medicaid when the family could easily bear the cost, accounts for a significant part of Medicaid costs.  If the states had to bear the full cost, we could expect a decrease in this misuse of Medicaid.

     Moving Medicaid and other federal government activities to the states may be necessary to prevent the federal financial disaster now waiting in the wings.

     Transferring Medicaid to the individual states would decrease the severity of the financial disaster hanging over our heads.  This would be a challenge to state legislators, but a decrease in the risk to our future well-being.

     Meanwhile, a small step in this direction can be taken.  Federal Medicaid regulations to eliminate some fringe Medicaid benefits should be allowed to take effect.  Those regulations were postponed, and House Bill 3533 to extend the postponement is being debated.  It is shameful that Congress cannot seem to take even a small step in the right direction – House Bill 3533 should be defeated.





     The January/February 08 “FREEMAN” includes an excellent review of “The cure:  How Capitalism Can Save American Health Care” by David Gratzer, a Canadian M.D. He shows how spending climbs when out-of-pocket share falls.

     Quoting from Jane Orient’s review, “Medicaid was supposed to help the poor, but one of its most expensive roles is to serve as inheritance insurance for the wealthy.  One of the fastest-growing areas of legal practice involves helping the affluent qualify for Medicaid long-term care”.

     The book, published by Encounter Books is $25.95.  If you like, we’ll share the book review with you.


Does somebody already offer this?


·        Plastic “chore girl” that won’t scratch

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